(C) Under a double entry system, show how the entry in each statement is entered in the ledger by using

debit or credit to indicate the increase or decrease in the affected account. Debit or Credit 1. An increase in Salary Expense. ___________________

2.

A decrease in Accounts Payable.

___________________

3.

An increase in Prepaid Insurance.

___________________

4.

An increase in Owner's Capital.

___________________

5.

A decrease in Office Supplies.

___________________

6.

An increase in Owner's Drawings.

___________________

7.

An increase in Service Revenue.

___________________

8.

A decrease in Accounts Receivable.

___________________

9.

An increase in Rent Expense.

___________________

10.

A decrease in Store Equipment.

___________________

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(D) For the accounts listed below, indicate if the normal balance of the account is a debit or credit. Accounts 1. Service Revenue Normal Balance Debit or Credit __________________

2.

Rent Expense

__________________

3.

Accounts Receivable

__________________

4.

Accounts Payable

__________________

5.

Owner's Capital

__________________

6.

Office Supplies

__________________

7.

Insurance Expense

__________________

8.

Owner's Drawing

__________________

9.

Office Building

__________________

10.

Notes Payable

__________________

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(E) Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transactions. 1. The owner, Nick Brown, invests $20,000 in cash in starting a real estate office operating as a sole proprietorship. 2. Purchased $400 of office supplies on credit. 3. Purchased office equipment for $7,500, paying $2,500 in cash and signed a 30-day, $5,000, note payable. 4. Real estate commissions billed to clients amount to $5,000. 5. Paid $700 in cash for the current month's rent. 6. Paid $200 cash on account for office supplies purchased in transaction 2. 7. Received a bill for $500 for advertising for the current month. 8. Paid $2,200 cash for office salaries. 9. Brown withdrew $1,200 from the business for living expenses. 10. Received a check for $4,000 from a client in payment on account for commissions billed in transaction 4.

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(F) Transactions for Nolan Company for the month of October are presented below. Journalize each transaction and identify each transaction by number. You may omit journal explanations. 1. 2. 3. 4. 5. 6. 7. 8. 9. Invested an additional $45,000 cash in the business. Purchased land costing $28,000 for cash. Purchased equipment costing $8,000 for $4,000 cash and the remainder on credit. Purchased supplies on account for $800. Paid $1,000 for a one-year insurance policy. Received $2,000 cash for services performed. Received $4,000 for services previously performed on account. Paid wages to employees for $2,500. Nolan withdrew $1,500 cash from the business.

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